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BP and SOCAR Turkey today announced that they have signed a heads of agreement (HoA) to evaluate the creation of a joint venture that would build and operate a world-scale petrochemicals complex in Turkey.

The proposed facility, in Aliaga in western Turkey, would produce 1.25 million tonnes per annum (tpa) of purified terephthalic acid (PTA), 840,000 tpa paraxylene (PX) and 340,000 tpa benzene.

PTA is used to manufacture polyesters, which have many uses including food and beverage containers, packaging materials, fabrics, films, and other consumer and industry applications.

Following the signing of the HoA, BP and SOCAR Turkey now expect to undertake design work for the facility, which would allow for the integration of feedstock supplies from the nearby new STAR refinery and Petkim petrochemicals complex, both owned by SOCAR Turkey.

Vagif Aliyev, Chairman of the Board of SOCAR Turkey, said: “We entered the Turkish market in 2008 with the acquisition of Petkim and since then have realized giant projects such as the STAR refinery, TANAP, Petlim Container Terminal and Petkim Wind Power Station. The area covering all of SOCAR Turkey’s projects in Aliaga has recently become the first Private Industrial Zone in Turkey. The immediate proximity to the feedstock and infrastructure provided by SOCAR’s other facilities will contribute significantly to the competitive power of the new facility. Expanding our immense refining and petrochemical complex, built at the gateway to world markets on the Aegean coast of Turkey, we aim to continue to contribute to the economies of the two brother countries – Turkey and Azerbaijan.”

"If taken forward, this would be the largest integrated PTA, PX and aromatics complex in the Western Hemisphere and BP’s first major new aromatics platform since our Zhuhai site in China opened nearly 20 years ago"

Luis Sierra, CEO for BP’s global aromatics unit

Luis Sierra, CEO for BP’s global aromatics unit said: “If taken forward, this would be the largest integrated PTA, PX and aromatics complex in the Western Hemisphere and BP’s first major new aromatics platform since our Zhuhai site in China opened nearly 20 years ago. The combination of BP’s leading proprietary technology and integration with SOCAR’s new refinery could create an outstanding platform to serve Turkey’s growing polyester packaging and textiles industry. We look forward to drawing on the strengths of both BP and SOCAR to explore the creation of a highly competitive facility.”

BP and SOCAR expect to work towards a potential final investment decision in 2019, which could result in start-up of the new plant in 2023.

BP’s latest proprietary PTA technology has significantly lower capital and operating costs when compared with other PTA technologies. It is more energy efficient, uses less water and produces less solid waste than similar technologies on the market.

BP and SOCAR are longstanding partners in a number of major oil and gas production and transportation projects in Azerbaijan, Turkey and the wider region, including the Shah Deniz 2 gas project in Azerbaijan that began production early this year, exporting natural gas to Turkey and beyond.

“This proposed new investment is a ‘win-win’ situation for both SOCAR and Turkey. It will not only increase our share in Turkey’s petrochemical markets, but it will also help to reduce Turkey’s imports of these products, hence reducing the foreign trade deficit. All of our projects in Turkey are planned with this goal in mind,” said SOCAR Turkey CEO Zaur Gahramanov.

“This potential major new direct investment would be our first equity investment in petrochemicals in Turkey, a country where BP has now been present for over 100 years. Turkey operates as a bridging country between the East and West, and between producers and consumers, and its fast-growing economy offers attractive investment opportunities,” said Mick Stump, president of BP Turkey.

Notes to editors

The State Oil Company of the Azerbaijan Republic (SOCAR) is involved in exploration of oil and gas fields; producing, processing, and transporting oil, gas, and gas condensate; marketing petroleum and petrochemical products and supplying natural gas to industry and the public in domestic and international markets.

SOCAR TURKEY ENERJI A.Ş (SOCAR Turkey) is a subsidiary of SOCAR, the State Oil Company of the Azerbaijan Republic, and is Turkey’s largest international investor with more than $14.2 billion of investments in the energy area. SOCAR Turkey’s investments include: Petkim, Turkey’s leading petrochemicals manufacturer; STAR Refinery, which began operations in 2018; the TANAP pipeline, which will transport Caspian gas through Turkey and onwards to Europe, and Petlim, the largest container port on Turkey’s Aegean Sea coast.

BP has been operating in Turkey for more than 100 years and is one of the largest investors in the country and the region. BP has significant fuels, lubricants and aviation businesses in Turkey, and is a shareholder and the operator of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline and is the only multinational shareholder in the TANAP gas pipeline.

BP and SOCAR have a longstanding relationship in the oil and gas industry in Azerbaijan. Their partnerships include the Azeri-Chirag-Gunashli oil field development and the Shah Deniz gas field developments in the Caspian Sea, and the BTC oil export pipeline and the SCP, TANAP and TAP gas pipelines. BP and SOCAR also partner in exploration projects in the Caspian including Shafag-Asiman, Block D230, Shallow Water Absheron Peninsular and Gobustan production sharing agreements

Cautionary statement

In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’), BP is providing the following cautionary statement. This press release contains certain forward-looking statements – that is, statements related to future, not past events and circumstances – which may relate to one or more of the financial condition, results of operations and businesses of BP and certain of the plans and objectives of BP with respect to these items. These statements are generally, but not always, identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’ or similar expressions. Actual results may differ from those expressed in such statements, depending on a variety of factors including the risk factors set forth in our most recent Annual Report and Form 20-F under “Risk factors” and in any of our more recent public reports.

Our most recent Annual Report and Form 20-F and other period filings are available on our website at www.bp.com, or can be obtained from the SEC by calling 1-800-SEC-0330 or on its website at www.sec.gov.